S.S. solvency suspect | TheUnion.com

S.S. solvency suspect

Lawrence Kinkor (Other Voices) believes the government’s assessment of Social Security’s solvency. I’m not convinced. Perhaps someone could help me by answering a simple question.

In 2018 – 13 short years from now – Social Security payments will exceed tax revenues. What’s going to cover this shortfall? The Trust Fund?

The Trust Fund arose because the federal government’s general fund has been running a deficit and borrowing from Social Security’s surpluses. In exchange, the federal government has given IOUs to Social Security. Let’s fast-forward to 2018. How do these IOUs get converted into cash? The federal government is already in debt, outspends its income, and has no hard assets it’s going to sell. So that cash can come from three sources only: selling bonds, cutting spending, and raising taxes. Selling more bonds may flood the bond market, raise interest rates, and create an overwhelming debt burden for our children. Spending cuts will be especially hard for Washington to accomplish. Raising taxes -and they will have to be raised a lot – will also burden our children.

In short, the so-called Trust Fund is a financial scam that dwarfs Enron. It is a bunch of IOUs given by one branch of the government to another.

Charley Hooper


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